The Conservative government’s anticipated lawful Internet access law could financially wipe out small Canadian Internet service providers, warns a lawyer for a group ISPs

Assuming it will be the same act introduced in the last Parliament, “this isn’t going to be sustainable,” Chris Tacit, who acts for the Canadian Network Operators Consortium (CNOC), said Wednesday during a regulatory panel discussion at a conference in Toronto for independent ISPs.

“If a smaller ISP has to make major network changes it could be game over.”

The government has to face the possible economic impact for ISPs of all sizes, he added, but “crucial” for small service providers.

Jonathan Daniels, vice-president of regulatory law at BCE Inc., which owns Bell Canada [TSX, NYSE: BCE], said the carrier wants to see the final act and the accompanying regulations, which might outline government compensation for complying with the act. Regulations weren’t published when the proposed act was introduced in the last parliament.

“We have big concerns about the capital requirements” for equipment, Daniels, said as well for possible high annual operating costs of maintaining a real-time data surveillance system across the country.

The Investigating and Preventing Criminal Electronic Communications Act (numbered Bill C-52) was introduced in the last parliament but died when the May election was called.

The Harper government, which now has a majority, says its crime-related legislation will be re-introduced. It already started with an omnibus bill consolidating several pieces of legislation. Geist believes the lawful access act will be re-introduced into Parliament before the end of the year.

The law would give law enforcement agencies lawful access to certain subscriber information without a judicial warrant. Again, assuming the proposed act isn’t changed,

within six months of coming into effect service providers would have to report to police what their networks look like and their real-time data surveillance capabilities. Law enforcement agencies would have the power to test a provider’s surveillance capabilities.

ISPs may have to add deep packet inspection (DPI) appliances to their networks, Geist warned, to meet the data surveillance requirements. Government may give ISPs three years to buy necessary equipment, he added.

The law would also create a series of new judicial orders forcing ISPs to preserve customer information for an investigation.

The OpenMedia.ca consumer group has created a Web campaign called Stop Online Spying to protest the proposed law.

Panelist Steven Anderson, who heads OpenMedia.ca, said a letter of concern from ISPs to members of parliaments “would be really powerful.”

“I think ISPs are concerned about the extent to which they are forced to be complicit in matters of state surveillance,” Tacit added, “and there needs to be a careful balance. I don’t think ISPs want to be perceived as arms of law enforcement and national security. We need to be concerned about the balance in this legislation.”

However, Geist warned “we’re going to get smoked” if the debate is merely about getting the right balance of privacy and security in the legislation. “I don’t see this government as being particularly receptive to that argument. Cabinet members may be more receptive, he added, to an argument from independent ISPs that the legislation puts their financial survival on the line.

Currently a freelance writer, I'm the former editor of ITWorldCanada.com and Computing Canada. An IT journalist since 1997, I've written for several of ITWC's sister publications including ITBusiness.ca and Computer Dealer News. Before that I was a staff reporter at the Calgary Herald and the Brampton (Ont.) Daily Times.